Accounting & Auditing Financial Statements
Bailey & Utley has assisted clients with preparing financial statements to meet requests by creditors and insurance companies in the for-profit sector and grantors and foundations in the not-for-profit sector.
- Audit report
- Review report
- Compilation report
We will assist you in determining the type of report that is necessary. There are factors, such as the needs of the client, requirements of creditors or investors, the size and complexity of the business, and other considerations.
Shareholders, creditors, and private investors often need assurance that financial statements accurately represent the true financial position of a company.
There are 3 levels of assurance:
1) Audits - Highest Level of Assurance
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Based on our findings, we issue a report on whether the financial statements are fairly stated and free of material misstatements.
An audit allows you to accomplish the following:
- Satisfy shareholders, employees, customers, suppliers, and other interested parties as to the credibility of the financial statements.
- Satisfy grantor and foundation requests.
- Satisfy ERISA requiremnts (401(k) or other retirement plans).
- Comply with banking covenants.
- Help deter and detect material fraud and errors.
- Facilitate the purchase or sale of a business.
Bailey & Utley has been providing audit services at reasonable fees to a wide range of industries. Our audit approach utilizes current audit procedures that allow the audit to focus on important areas and efficient techniques.
2) Reviews - Limited Assurance
Reviews consist principally of inquiries of company personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit.
A review does not require an evaluation of the company's internal controls, verification of data with third parties, or physical inspection of assets as does an audit. A review report expresses limited assurance in the form of a statement: "We are not aware of any material modifications" for the financial statements to be in conformity with generally accepted accounting principles.
Often a review can be performed instead of an audit. It is advantageous from an expense stand point to determine if a review can replace an audit. It allows for technical expertise at the cost of an audit.
Reviewed financial statements must include all required footnotes and other disclosures.
3) Compilations - Lowest Level of Assurance
A compilation of financial statements is limited to presenting in the form of financial statements information that is the representation of management or owners and expresses no opinion or any other form of assurance. Accordingly, we are not required to make inquiries or perform procedures to verify or review management furnished information. We rely on our knowledge of accounting principle and a general understanding of our business. However, though not required, our firm frequently communicates to management aspects of the financial data (positive and negative) that may warrant attention.